Executive Summary

Booster juice franchise offers a wide variety of smoothies comprising of pure juice, fruit

sorbet, vanilla frozen yogurt, frozen fruit, fresh yogurt. The store will be located at

Preston Crossing at the mini mall strip, opposite Walmart. The shop will be incorporated

with one manager, four part-time and two full time employees. The manager will be on

salary and will oversee all operations. Two supervisors will oversee day to-day

operations of the shop and the four part-time employees will be responsible for customer

services. Both full time and part-time employees will be paid hourly wages. Initial

requirements for all furniture, fixture, computer software and hardware and equipment

will be supplied by Booster Juice Inc as part of the turnkey operation. All other supplies

will be purchased from Booster Juice Inc. Our shop will be incorporated. Richard

Azinwi, Nadia Maqbool and Ravi Brar will be the equity owners. We will have a total of

seven employees comprising of one manager, two full time supervisors and four part-

time employees. As part of our franchise deal, Booster Juice Inc will offer continuous

training and support to our employees.

Marketing for the Booster Juice is done by the franchisee and franchisor. The franchisor

will do large scale marketing for all of the franchisees, as per the royalty agreement. Our

Booster Juice will concentrate on local advertising. We will be doing an aggressive

advertising in the first year to create store awareness. First, we will send out flyers to

everyone in the S7N postal code area through Canada Post. We will also promote our

location at the U of S by offering students and staff a 5% discount with the presentation

of their student and employee card. Secondly, we will also work with the other

franchisees in the Saskatoon area by providing all local gyms with a one time 10% off

coupon for their members. Therefore, the gym members can visit the Booster Juice

location most convenient to them and increase the Booster Juice brand awareness in the

whole city. A long term strategy for our Booster Juice would be to build a relationship

with one of the gyms in Saskatoon and in the long term open small locations within their

gyms.

Our target market will be healthy active people in the University area. The people will

attend the gym and also like to eat healthy but may not have time to do it themselves;

Business Plan 1

therefore they can come to our location and quickly pick a healthy shake while they are

on the go.

The estimates for developing the financial model of Booster Juice have been derived

from the marketing, operations and Human Resources plan. The sales prices are expected

to grow at 2% inflation rate. The aggressive advertising and marketing will help the

business to grow by 20% in the first two years. From the third year onwards, the sales

growth will start stabilising. The business intends to borrow $200,000 at 6%, this debt

will be amortized over a ten year period. There will be a 50-50 debt to equity ratio.

Dividends will be distributed from the first year of operations. The proposed dividend

policy is to hold $20,000 cash in hand from the second year onwards. The required rate of

return on this business has been taken as 15%. With the projected cash flows and an

investment of $200,000, the expected rate of return on investment is 18%, which means

making an additional $45,000 on the investment. The profitability ratios have also been

calculated, which indicate that the business will start making profits and generating cash

from the second year of operations. The return on assets and return on equity will be 11%

and 15% from the third year and this will keep on growing in the next years.

Risk analysis has also been done. The critical factors for our Booster Juice are the

number of customers and interest rate. The business has its economic breakeven on 77

customers in the first year and an interest rate of 11% for ten years. Apart from that even

if the business is not able to grow by 20% as projected, the sales growth breakeven is less

than 15% in the first two years. The scenario analysis has been performed and it shows

that in the worst case scenario, if the number of customers drops to 60 and the interest

rate rises to 7%, the business will be having an NPV of -$48,000. On the other hand as

the best case scenario, if the number of customers increases to 100 and interest rates fall

to 5%, the business will have a 36% IRR and $538,000 NPV.

Business Plan 2

Operations Plan

Booster juice franchise offers a wide variety of smoothies comprising of pure juice, fruit

sorbet, vanilla frozen yogurt, frozen fruit, fresh yogurt (refer to appendix 3). Our

smoothies are ideal as meals on the run, power breakfast, afternoon treats and work-out

snacks We intend to promote a healthy lifestyle by providing freshly squeezed fruits

juices with added nutritional supplements. Our target customers typically are health

conscious and are interested in obtaining fresh and nutritious food. The store will be

located at Preston Crossing at the mini mall strip, opposite to Walmart. This is a fast

developing area that currently does not have any healthy alternative to the typical fast

food restaurant chains. Figure 1.0 is an aerial photo of a 1 kilometre circumference of the

actual site of the location

Figure 1.0 Site Location

This location is a fast developing area with a mini strip mall containing major shops such

as Walmart, Canadian Tires, The Gap, Future Shop etc. Apart from McDonalds located

in Walmart, there is no healthy food store in this area. This site is easily accessible with

parking lot for customers.

Business Plan 3

Site Location

We will lease 900 square feet space from an extension of the strip mall across the street

from Walmart We believe this space is enough to accommodate 10 to 15 customers at a

time. As part of the franchise deal, the Franchiser will provide the furniture, equipment,

fruits, food and merchandise. There are three other booster juice shops in the city, but

they do not offer the unique customer services we intend to provide to our customers.

Furthermore, there is a need for a healthy food store in this location.

Legal Structure

Booster Juice will be incorporated.

Organizational Structure – Refer to appendix 1

The Booster Juice shop will be managed by co-owner, Ravi Brar. The other two co-

owners Nadia Maqbool and Richard Azinwi will hold the positions of supervisors for

morning and evening shifts. Four other part time employees will be hired; two of them

will work in the evening shift and the other two in the morning shift. The manager and

the supervisors will monitor the day –to-day operations with the part time staff

responsible for sales and services.

Business Plan 4

Average Business Day- refer to appendix 2

The shop will be open from 10am to 9pm. The manager and supervisors will work full

time while different time slots will be allocated to part – time employees based on their

availability. The manager will take the week-end off while supervisors will fill in for

Saturdays and Sundays. On Sundays, the shop will be open from 10am to 5 pm.

Job description

Manager’s responsibilities are as follows:

Open shop along with one supervisor and part-time employees

Oversee staff scheduling

Approve day’s cash float

Approve expenditures

Assist in customer services during peak periods

Resolve any problems that might have occurred the previous day

Cash drop at the closest Royal Bank of Canada on College Drive

Supervisors will be responsible for the following duties:

Order suppliers if needed

Review days inventory

Assist manager in opening and closing shop

Serve customers

Ensure everything is up and running

Open and close shop on Saturdays and Sundays

Part-time employees

This position will require shift work with a lot of flexibility to accommodate the needs of

the employees. Their responsibilities will include:

Display fruits and merchandise for easy access and where customers can see

Empty garbage, clean the floor and tables.

Organize the sitting area

Clean mugs and utensils

Business Plan 5

Get everything ready for open at 9am

Serve customers

Weekly duties

This will include re-stocking of merchandise, fresh fruits and vegetables and nutritional

supplements. Weekly counts will have to be made to ensure that inventory numbers are

correct and fruits and vegetable spoilage are accounted for.

Supply Analysis

Initial requirements for all furniture, fixture, computer software and hardware and

equipment will be supplied by Booster Juice Inc as part of the turnkey operation. As part

of our franchise deal, all suppliers will be purchased from Booster Juice Inc. We will

maintain an inventory turnover of 7 days or less for fruits and vegetables. This ensures

that the drinks we serve are fresh. Merchandise and nutritional supplements will be kept

till expiry dates while food will have one day inventory turnover.

Table 1.0 Capital Budget

Capital Budget 2010 2011 2012 2013 2014 2015 2016 2017Equipment:

Full Size Refrigerator 2,500

Mini Refrigerator 600

Freezer 3,500

3 Blenders 6,000

2 sofars and 10 stools ( $400per)

1600 800

Mini oven 6000

Dishwasher 3,800

Cash Register (2) 5,000

Display Case 209

Business Plan 6

Refrigerated Deli Case 2,748

Ice maker 3,000

Office Equipment 3,098

Total Capital cost 38,055 800

Explanatory notes : Complete capital budget is provided in our financial assessment

Table 1.1 Operating and Marketing Expenses

2010 1011 2012 2013 2014 2015

Royalty Fee16042 19459 22825 25610 28734 30774

Local marketing 7000 4000 4000 4000 4000 4000

Rents ( $25@900) 22500

22950 23409 23877 24355 24842

Insurance 5,000

5,100 5202 5306 5412 5520

Repairs & maintenance 3375 3443 3511 3582 3653 3726

Phone & utilities 5625 5738 5852 5969 6089 6210

Salaries and wages 115529 117840 120197 125053 127554 130105

General suppliers 26736 32431 38042 42683 47890 51290

Incorporation fees 250

40

40

40 40

40

Start up franchise fees 25,000

Interest on long term loans 12000 11674 11328 10961 10573 10161

Total 214057 222673 234406 244629 255798 264118

Business Plan 7

Explanatory notes: Refer to our financial assessment for complete operating and marketing expenses

Human Resources Plan- Refer to appendix 1

Richard Azinwi, Ravi Brar and Nadia Maqbool are the equity owners of the booster juice

shop. Nadia brings a lot of experience in operational management and finance while Ravi

and Richard have more than 4 years each in the food and beverage industry. The four

part-time employees have previous experiences working with Booster Juice and/or Jugo

Juice franchise. Appendix 2 provides a work schedule for each employee. Daily and

weekly hours are outlined.

Salaries and wages

The manager will be on a salary of $50,000 a year while all full time and part time

employess will be paid $9.00 and $8.25 an hour respectively. Supervisors will make more

money than part-time employees since they will be allocated more working hours.

Training and Support

As part of our franchise deal, training will be provided by the franchiser. The co-owners

will undergo training for 10days at Booster Juice headquarters. There will be another 1 to

3 days training offered by Booster Juice Inc at our location. This training will include

part-time employees. Further training will be required as necessary. During the operation

of our business, the following support will be provided.

On-going advice and consultation regarding operations and management of our

business.

Access to promotional programs and material

Train replacement or additional managers in their head office in Edmonton

Offer refresher training courses and convention to our employees

The following quality controls will be put in place to ensure best services are provided to

our customers.

Business Plan 8

Any employee hired must have relevant work experience with the food industry.

It is expected that these individuals will have the knowledge necessary to help

satisfy customer’s needs.

Employees will be required to meet Booster Juice organization’s culture and

values.

We will continuously monitor and ask for feed back from customers to ensure that

our services and the quality of our food satisfy their needs. This will be done

through customer satisfactory survey. Monthly meetings will be held for review

and suggestions.

Business Plan 9

Marketing

Saskatoon is a city of approximately 233,000 people and is in one of the only provinces

expected to have an expanding economy this year. There are also approximately 15

gyms located around the city. Saskatoon also has a river valley which is used by its

citizens for walking, running and cycling. The city also has many sports leagues

throughout the year in a wide variety of age groups.

Currently, 4 Booster Juices are present in Saskatoon and another one is about to open.

However, none of them is in or around the Preston Crossing area, which is in close

proximity to the University of Saskatchewan.

The competition for Booster Juice in Saskatoon is quite limited. The only direct

competitor, Jugo Juice, has now closed on the University of Saskatchewan campus and

there are no other locations in the city. However, there are many substitute products in

the market. These products are; energy drinks, health shakes, and homemade fruit

smoothies. Energy drinks and health shakes can be purchased from any grocery and

convenience store. Energy drinks are quite popular today, but do have a negative image

for the health conscious individuals. Some research has shown energy drinks may have

long-term side affects and the benefits may not out weigh the costs. Various health

shakes are also available. Some are simple drinks that can be purchased pre-made and

others are sold in powder form and have to be mixed with milk or water before taking.

The price can range on these drinks from very inexpensive to very expensive. The simple

shakes are inexpensive but do not come with all the vitamins and benefits that a Booster

Juice drink does. The expensive shakes are usually made for individuals who want a lot

of protein or a quick burst of energy before they work out so they can work out longer

and harder to build up their muscles. Booster Juice is not made as that kind of drink,

even though we have a protein booster, it has not as much as those protein drinks contain.

Therefore, Booster Juice is not in direct competition with those drinks and will not

directly target those users. Booster Juice is mixed and prepared in front of the customer

and is fresh and convenient. There are also many different types of drinks that range

from energy, protein, diet, metabolism, and vitamins (refer to appendix 3).

Business Plan 10

Another trend that will benefit Booster Juice is the social trend towards a more healthy

active living. There is a growing number of people, who are becoming more active at

any age. People are running, cycling, and going to gyms. Gyms are one of the fastest

growing industries in North America. Also, the lifestyle of Canadians is busy. People

are trying to work, have a life, and stay healthy. These individuals are always on the go

and Booster Juice provides a quick healthy option for active people on the go.

The Booster Juice will target at the local area around our business and the University of

Saskatchewan. The area could be described as everyone that falls within the postal code

area of S7N. Within that area, we would like to target active individuals on the go.

These individuals like to eat healthy and nutritious. Booster Juice can give them a

healthy and nutritious shake at their convenience. They can quickly drop by our location

on their way to work, gym or school and pick up a drink that they know is good for them.

The opportunity in the area we are looking for is great. Jugo Juice is no longer present at

the University and the closest Booster Juice is on 8th street. Also, the commercial

development of Preston Crossing is still growing and has a large traffic due to Walmart,

Sobeys, Future Shop, and Canadian Tire. People from different areas of the city come to

the Walmart, which we will be in close proximity to. Also the neighbourhood around

Preston Crossing has many students who attend the U of S. Students are fairly active and

attend the gym, but are also very busy to have a healthy diet. Students will be one of our

key target markets.

The pricing strategy for our business is set by Booster Juice, since we are a franchise.

Therefore, we do not have much control over the price, but we may offer discounts.

Booster Juice corporate will also do some of our advertising on our behalf, paid through

our royalties. Any large scale advertising, such as television will be provided by the head

office for all Booster Juice franchises. However, we will still spend some money on

advertising for the local area. We have a strategy to spend more money on the first year

to build awareness and attracting people to the store. This will be done by sending out

flyers to the whole postal code area of S7N through Canada Post. We will also offer

students of the University and their staff a 5% discount on all shakes with presentation of

their student or employee card. The offer to students (one of our target market) and mail

out to the local area will create the awareness of our store in the local area and also attract

Business Plan 11

many individuals to try Booster Juice from our locations. And our close proximity to the

University will allow students and staff to come at lunch and have a healthy shake.

Another strategy we will do is to work will the other Booster Juices franchisees in

Saskatoon and target all of the gyms in the city to promote all of our locations. We could

offer the gyms a one time couple of 10% off for all of their members. All of the

franchisees can also work with our corporate office to sponsor some local sports

tournaments throughout the year. This will show Booster Juice and their franchisees as

members of their community and also help promote the brand and attract more customers

to all of our locations.

The long term strategy for our franchise will be to build a relationship with one of the

local area gyms and in the coming years open small Booster Juice shops within their

locations. This has been very successful for Booster Juice in Alberta where they have

partnered with Club Fit.

SWOT Analysis

We will derive from this SWOT analysis an understanding of how we could use our

opportunities and strengths to leverage our weaknesses and threats.

Strengths

Partnership with Saskatoon Health Authority, U of S gym and Lululemon

Athletica shop will offer access to target markets that share the same healthy

lifestyle vision

Comfortable lounge for our customers to sit and relax. A different atmosphere

from fast food chains

Innovation and product development – new Acai Brazilian Power Berry smoothie

a big success

High quality control standards. Support from Booster Juice Inc to ensure that we

have consistency in operations.

Business Plan 12

Growing juice and smoothie bar markets. Canadian Restaurant and Foodservices

Association (CRFA) named smoothies, the third fastest growing food and

beverage category behind cappuccino and wrapsé

Weaknesses

Teaching potential customers what a smoothie is and why they might need one is

key to our success. Though this is a fast growing industry, most people are still

unaware of the health benefits they could derive from smoothies.

Price is a concern. Some customers believe Booster juice is more expensive than

its competitors.

Several Booster juice and Jugo Juice are already present in Saskatoon with

established customers.

Opportunities

People are becoming more health conscious in their diet.

More people go to gyms today than 10 years ago, this physical mentality reflects

the increasing new trend in healthy lifestyle

Saskatchewan economy stable amid financial meltdown, thus, more disposable

income and projected higher sales.

Threats

Intense competition from other juice and smoothie bars such as Jugo Juice ( 65

franchise in Canada, 8 in US) , Julius ( 68 franchise in Canada, 124 in US) ,

Jamba Juice (525 franchise in US) and Smoothie king (380 franchise in US)

Preliminary research conducted by the American Institute for Cancer Research

warns that smoothies may contain more fat, sugar and calories than its perceived

healthy appearance. Such information may slowdown sales.

Business Plan 13

Financial Plan

The financial plan includes 10 year projections of income statement, balance sheet and

cash flow. The estimates have been derived from the following:

Revenue estimates from the marketing plan.

Cost of goods sold and capital budget from operations plan.

Operating expenses and capital budget from the operations plan.

Wages and salaries from the human resources plan.

Economic Forecast:

The inflation rate has been taken as 2% and the growth in sales prices have been assumed

to be the same as inflation. Booster Juice will be aggressively advertising in the first year

of the business, which would help the business grow by 20% in the first two years. After

that, the sales growth will start stabilising at 15%, 10%, 5% and eventually 2%.

Debt Amortization Schedule:

Since the current rate of borrowing is low these days, we will be borrowing $200,000 at a

rate of 6% and this rate will remain constant for Booster Juice business. The debt will be

amortized over 10 years time period. Schedule 7 of the financial model shows the total

payments and interest payment each year over the projected ten years of Booster Juice.

Dividend Policy:

The business will start distributing dividend in the second year of operations. We plan to

have $20,000 cash in hand, all above that would be distributed as dividends to the equity

holders.

Investment Analysis:

The investment analysis has been shown in Schedule 9 of the financial model.

Considering this as a risky business, the required rate of return has been taken as 15%.

With the projected cash and an equity investment of $200,000, the expected return on this

business is 18% and the projected cash flows are producing a value of $245,000 in this

business (Net Present Value).

Business Plan 14

Ratio Analysis:

Since this is a new business, only the relevant ratios i.e. the profitability ratios of the

business have been presented in this report. Booster Juice will have a negative net profit

margin in the first year, however, this would start improving when the business stabilizes

by the end of the second year. There will be 12% net profit in the third year and this will

keep on improving in the coming years.

The return on assets and return on equity also indicate negative figures in the first year.

These turn to slight positive in the second year, then increase to 11% and 15%

respectively in the third year and finally continue to grow in the next years.

Risk Analysis:

For analysing the risk of this business, some critical factors have been identified, which

can either boost or adversely affect the business. The following are these critical factors.

1. The number of customers

2. Interest rate

In order to cover the risk from the first critical factor, we will be creating awareness

among the target market by aggressively advertising as suggested in the marketing plan.

For the next critical factor, we are looking forward to maintain 50-50 debt to equity ratio

and not borrow any more in the projected 10 years.

Scenario Analysis:

Scenario analysis has been performed on the critical factors and the best case, base case

and the worst case have been studied by varying these factors. The results are shown in

appendix 4. As a worst case, if the number of customers expected at Booster Juice drops

to 60 customers a day and the interest rate goes up to 7%, then there would be a negative

NPV of $ 48,000 and the expected return on this business will be -6%. As the best case

scenario, if the number of customers increases to 100 customers a day and the rate of

interest decreases to 5%, then the expected return on investment will be 36%, with an

NPV of more than $500,000.

Business Plan 15

Breakeven Analysis:

Breakeven analysis has also been done. The critical variables have been observed for the

economic breakeven of the business, In order to have an economic breakeven, the

business can have the following:

1. 77 customers per day in the first year instead of 80 customers.

2. 14.7% growth in sales instead of 20% in the first two years

3. An interest rate of 11% instead of 6% for the ten years of business projections.

Business Plan 16

Appendix 1: Organizational chart for Booster Juice shop

Business Plan 17

ManagerRavi Brar

Appendix 2 - Total Weekly Schedule by hours

Manager( Salary)

Supervisor Supervisor Part-time Daily total

Monday 10am-9pm 1am– 9pam 10am-9pm 30Tuesday 10am-9pm 1am– 9pm 10am-9pm 30

Wednesday 10am-9pm 1pm-9pm 10am-2pm 23Thursday 10am-9pm 1am – 9pm 10am-2pm 23Friday 10am-9pm 1am – 9pm 1pm-9pm 10am-2pm 31Saturday 10am-5pm 1pm-9pm 15Sunday 10am-5pm 10am-5pm 14Total hours 47 31 40 166

Total part-time hours per employee (per year) 520Total full time hours per employee (per year) 2028

Business Plan 18

Appendix 3: Booster Juice menu

  Banana Beach - Health Kick Smoothies     Bananas-A-Whey - High Protein Smoothies     Banango Burst - High Protein Smoothies     Berry Cream Sensation - Spirit Smoothies     Berry Twister - Berry Smoothies     Blaster - Power Smoothies     Blue Banana - Berry Smoothies     Brazilian Thunder - Açai Smoothies     Breezy Banana - Tropical Smoothies     Canadian Colada - Spirit Smoothies     Citrus Swirl - Tropical Smoothies     Cranberry Crave - Health Kick Smoothies     Firefly - Juices     Ginger Hammer - Juices     Go Mango - Tropical Smoothies     Green Hornet - Juices     High Impact - Açai Smoothies     Kickstart - Health Kick Smoothies     Lemon Charger - Juices     Mango Hurricane - Tropical Smoothies     Marathon - Power Smoothies     Maui Juice - Juices     Mean Mocha - Spirit Smoothies     Orange Breeze - Juices     Original - Berry Smoothies     Raspberry Rapture - Spirit Smoothies     Red Sunrise - Juices     Ripped Berry - High Protein Smoothies     Sonic Soy - Power Smoothies     Soymilk Slam - Health Kick Smoothies     Strawberry Storm - High Protein Smoothies     Strawberry Sunshine - Berry Smoothies     Tahiti Squeeze - Juices     Terminator - Power Smoothies     Tropical Tornado - Tropical Smoothies     Very Berry - Berry Smoothies

Business Plan 19

Business Plan 20